Featured Product

    PRA Findings and Expectations on Solvency II Remuneration Requirements

    July 12, 2019

    PRA published a letter from David Rule (Executive Director, Insurance Supervision) to the Chairs of the Remuneration Committee of PRA-regulated insurers. The letter clarifies expectations of PRA from firms and Remuneration Committee Chairs in their implementation of the Solvency II remuneration requirements. The remuneration policies and practices of firms drive underwriting decisions, individual behavior, and organizational culture. This letter follows the PRA analysis of implementation by firms to date and highlights areas where firms would like further guidance. Insurers in the scope of the Solvency II regime must comply with requirements when setting remuneration policies and processes.

    The key topics covered in the analysis include material risk-takers, variable remuneration, ex-post risk adjustment, and role of the Remuneration Committee. The analysis has concluded that there is a wide range of interpretations of the Solvency II remuneration requirements and that, while firms’ implementation of the rules has improved over time, inconsistencies in their approaches to implementation remain apparent. This is in line with the feedback received in the meetings with Remuneration Committee Chairs, which suggested an appetite for further clarification from PRA to help address these inconsistencies. The letter highlights that PRA will continue to focus on remuneration in the ongoing prudential supervision of firms. PRA will seek to address any inconsistencies in the interpretation of the Solvency II requirements and share any findings that may help to improve firms’ understanding. PRA will consider whether it is appropriate to provide more clarification or guidance for firms.

     

    Related Link: Letter

     

    Keywords: Europe, UK, Insurance, Solvency II, Remuneration Requirements, Operational Risk, Remuneration Committee, PRA

    Featured Experts
    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    MAS Issues Guidance on Dividend Distributions by Banks

    MAS published a statement guidance on dividend distribution by banks.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5604